Office of Audit
FISCAL YEAR 2016 STATUTORY AUDIT OF
COMPLIANCE WITH LEGAL GUIDELINES RESTRICTING
THE USE OF RECORDS OF TAX ENFORCEMENT RESULTS
Final Report issued on September 19, 2016
Highlights of Reference Number: 2016-30-088 to the Internal Revenue Service Deputy Commissioner for Operations Support.
IMPACT ON TAXPAYERS
The IRS Restructuring and Reform Act of 1998 (RRA 98) requires the IRS to ensure that managers do not evaluate enforcement employees using any record of tax enforcement results (ROTER) or base employee successes on meeting ROTER goals or quotas. Use of ROTERs may create the misperception that safeguarding taxpayer rights is secondary to IRS enforcement results.
WHY TIGTA DID THE AUDIT
TIGTA is required under Internal Revenue Code Section 7803(d)(1) to annually determine whether the IRS complied with restrictions on the use of enforcement statistics to evaluate employees as set forth in RRA 98 Section 1204. Our review determined whether the IRS complied with:
· Section 1204(a), which prohibits the IRS from using any ROTERs to evaluate employees or to impose or suggest production quotas or goals.
· Section 1204(b), which requires that employees be evaluated using the fair and equitable treatment of taxpayers as a performance standard.
· Section 1204(c), which requires each appropriate supervisor to self‑certify quarterly whether ROTERs were used in a prohibited manner.
WHAT TIGTA FOUND
There were instances of noncompliance with RRA 98 Section 1204 requirements. TIGTA identified instances of noncompliance with each subsection of the law:
· Section 1204(a) – one potential violation.
· Section 1204(b) – 25 instances of documentation noncompliance.
· Section 1204(c) – 23 instances of noncompliance.
In addition, TIGTA identified one IRS policy violation. In this instance, the second‑line manager did not identify that the first‑line manager’s self‑assessment contained ROTER information, which should have been returned for correction.
TIGTA also noted that eight managers were missing from the Fiscal Year 2015 Section 1204 employee and manager listing, and a total of 80 employees and managers did not timely complete the mandatory Section 1204 training.
WHAT TIGTA RECOMMENDED
TIGTA recommended that the Section 1204 noncompliance and IRS policy violations identified in this report be discussed with the responsible managers and employees. TIGTA also recommended that Section 1204 managers and employees be properly identified as such within the IRS’s human resources system and that the mandatory Section 1204 training is assigned and completed. Additionally, TIGTA recommended that IRS efforts to achieve full compliance with RRA 98 Section 1204 procedures be strengthened by expanding management’s emphasis on employee behaviors that meet the Fair and Equitable Treatment of Taxpayers Retention Standard.
In response to the report, the IRS agreed with four of the five recommendations; however, the IRS still completed corrective actions pertaining to all five recommendations.
READ THE FULL REPORT
To view the report, including the scope, methodology, and full IRS response, go to:
Phone Number / 202-622-6500
E-mail Address / TIGTACommunications@tigta.treas.gov
Website / https://www.treasury.gov/tigta